PRINCIPAL COMMISSIONER OF INCOME TAX 1 V. KALUPUR COMMERCIAL CO. OP. BANK LTD.

TAXAP/1340/2018

AI Insights

The case involves the Principal Commissioner of Income Tax appealing against the decision of the Income Tax Appellate Tribunal, which had upheld the deletion of an addition made by the Assessing Officer concerning an amortized premium. The premium amounting to Rs.2,10,11,715 was initially added to the assessee's income for the assessment year 2012-13. The Commissioner (Appeals) deleted this addition, referencing a similar case and the CBDT Instruction No.17 of 2008, which allowed for the amortization of such premiums. The Tribunal's dismissal of the revenue's appeal led to the present appeal in the High Court, which was dismissed as the issue was already conclusively decided in a previous case.

• Counselvise Citation: [2019] 140 COUNSELVISE.COM (IT) 726211 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 08-01-2019
• Assessment Year: misc
• Other Referred Cases: DCIT v. Surat National Co-operative Bank Ltd., Commissioner of Income-tax, Rajkot-II v. Rajkot District Co-operative Bank Ltd.
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Assessee Lawyers: M R BHATT; MAUNA BHATT
• Keywords: Amortized Premium; Assessment Year 2012-13; Commissioner of Income Tax; Income Tax; Income tax appellate tribunal
• Section: 143(3); 260A; 119(2)

Judgement Text

"C/TAXAP/1340/2018 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 1340 of 2018 ========================================================== PRINCIPAL COMMISSIONER OF INCOME TAX 1 Versus KALUPUR COMMERCIAL CO. OP. BANK LTD. ========================================================== Appearance: MR M.R. BHATT SR. ADVOCATE WITH MS MAUNA M BHATT(174) for the PETITIONER(s) No. 1 for the RESPONDENT(s) No. 1 ========================================================== CORAM: HONOURABLE MS.JUSTICE HARSHA DEVANI and HONOURABLE DR.JUSTICE A. P. THAKER Date : 08/01/2019 ORAL ORDER (PER : HONOURABLE MS.JUSTICE HARSHA DEVANI) 1. By this appeal under section 260A of the Income­tax Act, 1961 (hereinafter referred to as the “Act”), the appellant­revenue has challenged the order dated 21.05.2018 passed by the Income Tax Appellate Tribunal, Ahmedabad Bench ‘A’(hereinafter referred to as the“Tribunal”) in ITA No.2124/Ahd/2016 by proposing the following question, stated to be a substantial question of law; “Whether on the facts and circumstances of the case, the Appellate Tribunal was justified in deleting the addition made by the AO on the issue of disallowance of Amortized Premium amounting to Page 1 of 4 C/TAXAP/1340/2018 ORDER Rs.2,10,11,715/­? “ 2. In this case, the assessee filed its return of income for assessment year 2012­13 on 20.09.2012 declaring total income of Rs.69,51,17,191/­. Assessment came to be framed under section 143(3) of the Act on 27.03.2015 inter alia making an addition on account of amortized premium of Rs.2,10,11,715/­. The assessee carried the matter in appeal before the Commissioner (Appeals), who deleted the addition by relying upon an earlier decision of the Commissioner (Appeals) in the assessee’s own case for assessment year 2011­12 as the facts were identical to that case. Before the Commissioner (Appeals), the assessee had relied upon the decision of the Tribunal in case of DCIT v. Surat National Co­operative Bank Ltd. in ITA No.2793/Ahd/2012 for assessment year 2009­10 wherein, it was held that as per CBDT, New Delhi Instruction No.17 of 2008 dated 26.11.2008, investments of banks classified under HTM (Held to Maturity) category need not be marked to market and are carried at acquisition cost unless these are more than the face value, in which case, the premium should be amortized over the period remaining to maturity. 3. The revenue challenged the order passed by Page 2 of 4 C/TAXAP/1340/2018 ORDER Commissioner by way of an appeal before the Tribunal, which came to be dismissed by the impugned order. 4. Mr. M.R. Bhatt, Senior Advocate, learned counsel for the appellant, reiterated the grounds set out in the memorandum of appeal. 5. It is an admitted position that the controversy involved in the present case is no longer res integra as the same stands concluded by a decision of this High Court in the case of Commissioner of Income­tax, Rajkot­II v. Rajkot District Co­operative Bank Ltd. and hence, it is not necessary to set out the facts and contentions in detail. 6. In the above decision, this court has held thus: \"7. The instructions clearly provide for amortisation of premium paid on acquisition of securities when the same are acquired at the rate higher than the face value. Such amortisation would have to be for the remaining period of maturity. This precisely the Tribunal had directed in the impugned order. Though contended, no contrary instructions of CBDT are brought to our notice. The instruction in question having been issued under section 119(2) of the Income­tax Act, 1961, would bind the Revenue. No question of law, therefore, Page 3 of 4 C/TAXAP/1340/2018 ORDER arises.” 7. For the reasons recorded by this court in its judgment and order passed in the case of Commissioner of Income­tax, Rajkot­II v. Rajkot District Co­operative Bank Ltd. (supra), no question of law can be stated to arise out of the impugned order passed by the Tribunal. The appeal, therefore, fails and is, accordingly, summarily dismissed. (HARSHA DEVANI, J) (A. P. THAKER, J) PRAVIN KARUNAN Page 4 of 4 "